million who will receive coverage under the medicaid expansion. a large percentage of those are people of copper -- are people of color. \ we wanted to ensure that african-americans, hispanics, asian-americans, and native americans have access to health care. i wanted to go to one of our poorer states that is not about to accept the medicaid expansion, i do not think. now medicaid expansion or state exchange. you mention that louisiana has one of the worst health statistics and has the most health disparities in in nation. expanding access helps reduce health disparities. their report was released about the cost of health disparities and found the health disparities

across the nation more than $82 billion in direct spending in one year. the highest burden is in the south where it cost about $35 billion in one year. are you concerned not expanding medicaid would exacerbate the disparities and leave more people as the sickest in our nation and increase the financial costs in the end? they are going to come to you at some point without having preventive care or health care maintenance when they are very sick and cost the state more. >> thank you very much to focus the attention on what all of the coverage is supposed to address, which is people oppose the health status and outcomes. in my state and state's nearby, was a great disparity in diabetes and obesity.

we have looked at the outcomes on medicaid and we do not see a great bit of difference. we have a system not turning out the kind of health outcomes we would expect for the amount of money we put a in. we have looked at expanding medicaid. let me show you some numbers around it. chairman waxman went through the numbers in louisiana for how many people would get it. he cited 265,000. we look at our numbers, the first year alone 467,000 people would join the roles. 187,000 already have private health insurance. we would see a cannibalization of the private health market taking healthy risk from a system where people pay some portion of their care and move

it into medicaid. hospitals and doctors will see reimbursement levels reduced. this is not an easy way to think through the expansion. >> nothing precludes you from making changes within the medicaid system to address some of the areas that may not be working. where you now see that medicaid coverage, patience do not do any better than patience who are insured. i have heard several panelists say, the law dictates to the states and not allow the flexibility. can it not fix under the medicaid system. >> we would be working closely with louisiana to do that. there is a steady in oregon that

looked at people on medicaid and not on medicaid, considered a gold standard study. it showed the care and well- being and the health outcomes for people receiving medicare coverage were far superior to those not having health care covered and were uninsured. there are lots of issues in louisiana that are challenging for anyone to tackle. the evidence around the country is that you can make medicaid work well for beneficiaries and improve health outcomes. the discretion around assigning the program and determining the delivery system, contracts with providers, those are positions that are state decisions. >> you mention native americans as a specific population. when we are switched to modified

adjusted gross income, in medicaid when the they are exempt from class sharing entirely in the medicaid program. we disregard certain income available to them as members of a tribe. that gets changed under magi. they will become tax credit eligible rather than a medicaid eligible. " i do not think that is the case. i hope they will get a chance to respond to that, because i do not think that is the case. >> we recognize mr. sarbanes. >> thank you for letting me participate today. i just want to say, and thank you for your tremendous work done this. it is incredibly exciting because you are helping to build an expanded infrastructure

that will provide more access to millions of americans. over time, it will begin to rein in health-care costs a did show an effective way for the system as a whole. what do you anticipate when we get to the end of this process as a number of states that will do a state basis exchange versus those federally facilitated? >> we do not know yet. there is a dublin on the state basis exchange coming up this friday. -- there is a deadline on the state basis exchange coming up this friday. we have heard from 14 states that want to be state based exchanges. the second deadline that comes along as february 15, next year. that is when we have asked states to tell us they want to be a denture a partnership

exchange. we will know more as far as how many work with us. >> thank you for being here and congratulations on the work in maryland. we are very proud of that. i wanted to ask you in view of the fact states will be making a judgment on whether they can stand up to a state based exchange, and another basis we will be looking at the partnership model, you spoke with your colleagues around the country who are making these decisions. what are the kinds of it zaidi's they express to you that you are able to say, look, there is a way to do this. rather it is a certain technical thing or the process of how you get a consensus behind it and get people comfortable moving

forward, what are you saying to your colleagues who may be one to get there but are worried a little bit about it based on the maryland experience, it can give them some comfort and confidence they can do this? >> thank you for your question and your leadership in maryland. there is a lot of engagement with the states moving forward on the state based exchanges. sometimes it is very explicit like a document or analysis that other states will use directly. we will use something they have done. sometimes it is talking over different situations. a couple of days ago in was baltimore we had a meeting at the exchange board, 75 people watching. we worked our way through a lot of issues. we have been talking to our peers around the country on how billing would be done. the exchange would take the first payment but the carriers after that. that is an issue where there are

different ways to go. we have figured out a way to partner effectively with insurance brokers. we decided to offer dental vision plans an exchange. for each of these things, there is a discussion. i understand there are issues involved. we have gotten energy from talking to people about these details in our state and other states. we have move forward with each part. >> i want to emphasize that from the beginning of this process, obviously a state looking at it without any peers having undertaken the process without cms and others having fully gotten into it yet, it would appear very daunting. states like maryland decided, we want to get out in front of this thing and other states had as well. we are at a point where the expertise that resides in cms

practical expertise plus the expertise that recites in a peer groups states that have started to build the exchanges and created the models and looked at the computer systems and how that will work, it means states that may be did not get us started as fast as they could arnel -- if they make the judgment to go forward they will come to the table with what is called a support group or a network of people who have hammered through these issues. they will be able to get where they need to go faster than you had to do is starting from scratch. that is important in understanding this is very feasible. if people get into this and start working on it, we will get the free market in place. >> that concludes the questions from the members of the subcommittee. we have time i think for two

follow up questions from each side. the chair will recognize dr. cassidy from our side. >> let's give some reality to an " opt -- involving medical. the study was driven by new york solely. in man although it was not significant, the expansion resulted in poor outcomes among those on medicaid. it was not statistically significant, but that was driven by the state of new york. in regard to the do-gooder states, new york pays physicians less well than does louisiana and texas and only 60% of positions in new york accept medicaid. that is not access.

just to clear of the record a little bit. now that we know that the one thing that has been shown to lower costs will not be allowed in the lmr unless it is spent -- we are now encouraging insurance companies not to sell them or to encourage the person to sell it -- what data do you have on the effect of the increase premium costs on some who say 200% of federal poverty level who is currently employed with sponsored insurance and dumped into the exchange of mackenzie quarterly that says what 30% of these employers will do have a value of 60%? what do you project will happen to that person?

>> we have been modeling the path to premiums in wisconsin medicates as the first of july. >> this is not a computer model. you actually have real live data. >> yes, sir. this is the actual experience. wisconsin has already expanded medicaid coverage. some of our eligibility groups transition to -- 300% above poverty. we have started applying only the premiums, not the additional cost sharing. >> not the $200 deductible. >> no, sir. in the results today, people at the lower income level because they are looking at a dollar a mountain not thinking of a percentage -- >> we are actually talking about a dollar amount.

>> 133% to 150% because the poverty level includes not only in, but the size of the family. your percentage of your gross income. >> please hurry, have one more. >> i apologize. the average now of $200 premiums participation was cut to in half. people are saying, we are not paying $200. >> 50% more people are without insurance? >> 50% drop to their medicaid insurance. >> when the working family employer put them on the exchange and they have a value of 80%, but it may be 60% on the bronze level, they're facing deductibles that no longer have faced before, they are dropping their coverage? >> exactly. >> this is good for the american

worker? what i think the results will be different. >> this is your actual experience? >> yes. >> we speak of percentages in d.c. the kaiser family foundation talks about how much louisiana will get. it will actually cost our state 1.6 -- $1.8 billion over 10 years. >> we expect the figures are understated and do not capture the full cost. >> they probably overstate the amount of taxes that will have to be raised for the cost. >> likely. when we looked at the study, we recognized there were very large ships in winners and losers. some ended up reducing the burden, and some increased. a good part of the discussion today is how states will save money by medicaid expansion, it

is just shifting costs from one place to the other. >> i agree with that. one more question. >> we better cut it off. you can submit it to an interesting. -- segment bit of in right thing. >> i want to give you a chance to respond to the comments. >> on the issue of the block grant? >> whatever you like. >> a couple of things to say. thank you for the opportunity. mr. smith harkened back to note in the children's health insurance program functions as a block grant. that is true. what we need to recall, although it is hard to remember back, is in the early years states ran out of money. states were desperate because

dollars allotted was what congress thought they needed. it was a set amount of dollars and it turns out the enrollment was higher and the need for higher and states were on the verge of shutting down their programs or putting their state dollars on the table to cover children. that is the nature of a block grant. it sheriff's risks onto states ultimately on too vulnerable americans -- it chefs' risks into states ultimately vulnerable. it is really not about trust. it is about having a financial partnership that works. i will submit without the financial partnership, we would be moving into 2014 with state's operating 20-year old legacy systems if we did not provide funding to help states finance eligibility. without the flexible financing, we would not have had the situation where over the years

people with hiv and aids or able to get care they needed, expensive care, and able to live healthy and productive lives or poor children with leukemia or opted -- autism were not able to get here to help them. when the federal government says that is all we will do and no more, we risk those kinds of results. what we need, it keeps us all at the table to make sure the program is as strong as possible. we have to get better care at lower costs. the partnership helps us get there. >> i just want to give mr. allison an opportunity in closing, why is medicaid expansion the right answers for your states? if you had to convince the other three, what would you say?

you have about 1 million -- one minute and 10 seconds each. >> i would ask them to spend time with individuals who would get coverage. you need coverage. i think we all agree there needs to be more value in health care. we need to get excess costs out. i think basic services and health care should not be considered excess. a couple of nights ago i was at a church with about 300 people in the disabled community. a mom got up and talked about what medicaid meant for her daughter born with a heart defect. it was a harrowing story. the little girl ran across and gave me a hug. it was a moment where we said, this is what medicate stands for. we need health care to work, but it should not be, keep people out first. it should be let's get people in

and move forward. >> i would just say congress passed, the supreme court upheld a law that provides significant incentives to states to save the lives of their own citizens, to improve their health, to provide financial protection. i represent a poor state with many who are uninsured and would never be able to afford care. that care makes a difference. it may be we face challenges in the future to make sure this remains sustainable with new commitments we are making, but i would just encourage my fellow states to consider the opportunity, which has presented itself now. >> thank you very much. >> all time having expired on the committee. there was.

without objection, i will make that part of the record. i think in fairness to you, i will submit a question about this data and would be grateful for your reply to that. the same courtesy will be provided as well. five business days -- it is actually 10 business days to submit questions to the record. we will ask witnesses to respond promptly. by happy occurrence, we will be here thursday the 27th. without objection, the subcommittee is adjourned. [captions copyright national cable satellite corp. 2012] [captioning performed by national captioning institute] >> coming up, an update on the

fiscal cliff negotiations. we hear from senate democratic leaders followed by a briefing from john boehner before his meeting with president obama. and then nancy pelosi. >> friday morning on washington journal, nina olson will discuss with the impending fiscal clause means for tax filing season. and then sarah kliff discusses medicare payments. jennifer ortman and william rey, demographers. 7:00 eastern on c-span. >> as president of? begins his second term in office, what is the most important issue he should

consider for 2013? >> make a short video about your message to the president. >> with your chance to win a grand prize of $5,000. $50,000 and total prizes. for more information, go to studentcam.org. >> harry reid and democratic leaders spoke to reporters about the fiscal cliff negotiations. it also focused on the senate democratic agenda including hurricane sandy legislation. this is 20 minutes. >> with every passing day, the republicans are calling on john boehner to guarantee tax cuts to

the middle class. today, sen. cornyn will be the second ranking republican next congress. they'll call upon john bennett to the reasonable thing. they will have this below sooner or later. those rates go up by operational law on dec. 31. within three-quarters of the american people including 61% of republicans agree with john cornyn that they cannot be held hostage were giveaways to billionaires. he cannot ignore the american people forever. at some point reality should set in. the only question is how much the trust's sole class families and how much they will have to

endure during this process. many other pieces of business critical to middle-class families that we will be working on if we resolve the fiscal cliffs. the three leaders here with me will talk about that today. they are waiting and waiting for the press conferences, and reality will set in. and it hasn't yet. he finished another one a short time ago. he is ignoring the voice of the american people. speaker boehner knows, or he should know, that we have to pass -- this would sail through the house of representatives. i would doubt that there could be any democrats voting for this and as we know, the

republicans -- more republicans joined every day. i understand that the house is gone until -- one reason that they're asking to leave is so more republicans will say that what they think he is doing is wrong. they are leaving and this is hard to comprehend. we have nothing to do until they do something. we're waiting for them to do something that will help the middle class. the american people should not have to have their tax cuts held hostage to the self interests. it is time to put the middle class first. >> thank you for joining us at this press conference.

>> the obvious question that the american people were asking is, what is john boehner waiting for? the farmers are trying to recover from a tough crop year but john boehner will not call a vote. what is john boehner waiting for? traditionally, we did not have a vote on this. we would not call this for passage. what is he waiting for when it comes to postal reform? so that we would make the postal service still retains the very best in the world. the most obvious and top local

question, what is he waiting for when it comes to tax breaks for working families across america? this is the reality we face. we sent the bill to him that will protect 98% of american families and he will not call it on the floor. is he waiting for what is going to happen january 1 when consumer confidence is shaken across america, as everyone sees an increase in income-tax rates, including working families because he will not act? is he waiting for the doctors, as of january 1, the reimbursement for doctors goes down 20% -- 27%. is he waiting for that to happen or is he waiting his election to speaker? i hope it is not that. i hope he understands putting this off is not fair to america

and is not been for the recovery. it will hurt us as we wait. there is no excuse. there is solid support among republicans and independents and democrats to make sure we protect working families and move forward. now the house is going home again. i do not know what we can accomplish but we certainly have depending on the floor major things that will help america. >> thank you. some other unfinished business, you have all seen on the tv screens the devastation. i have seen storms and powerful

and natural disasters and a hit individual people in an awful way. when you see how broad this is, hitting so many people in some places, it is astounding. let me say, we need help. the desperately need help in the new york-new jersey area. last night two billion people around the world tuned into a benefit concert to help raise money for sandy's relief efforts and now it is time for the government to step up to the place. congress has stepped up 39 times to help state and local governments to respond to disasters. there is a wisdom here that has been in the federal government

for decades. that is, when god's hand strikes no localities can handle it on their own. we unite as a nation to help one another. following katrina the government passed aid following 10 days of after the storm. we passed nine fundamentals a total of $108 billion and frankly, the damage from sandy, the economic damage is worse. they lost about 270,000 homes and in new york we lost 305,000 homes. gone were severely damaged. that is new york alone. they had about 20,000 small businesses, put out of business, gone. we have over 270,000. so the damage is enormous. and you know we members of new york delegation have always been there when other parts of the nation were struck by disasters. new york tax dollars went to the gulf and to fight fires out west and flooding in the

missouri and mississippi valleys and now, unfortunately, we've been struck. we hope and except our colleagues to show the same courtesy to us. chairman, in a way the senate appropriation committee has done an excellent job. leader reid has indicated that we're going to move it to as soon as impending issues are complete. i believe we start monday morning or monday afternoon. we hope this is a bipartisan priority. i've been concerned so see some reservations expressed by some of my colleagues on the other side of the aisle. i want to address a few. the big unfortunate myth out

there is we should not move further until huge spending cuts are agreed to at the same time. we never bog down disaster aid request with political disagreements like this. the first large katrina relief package, the same amount we're talking about here was not offset and it passed with no fewer than 97 votes and president bush's full support. second, some people on the other side of the aisle speculated that the affected areas may not be able to spend the money right away and we should not act quickly. this is a misinterpretation of the report. when a major project is undertaken the government doesn't pay out the costs until the project is complete. so if a locality is going to rebuild a road or tunnel they need to know that the money is there so they will know they will be reimbursed. if you want to do this year by year, you can't say we'll fix

the large tunnel, we'll fix half a mile this year and we'll see if we can get the money next year. or we'll build after the dunes to protect staten island now and we'll wait until next year to see if we have it next year. that is not how it works. the report relies on past strategies. so for instance they said only $85 million would be sent this year. that is laughable. i spoke to new york and new jersey that is wrong. they base it on what happened with katrina. this is a whole different process. in katrina, the number one thing will help homeowners rebuild. in katrina many of them moved away. we have homeowners living in homes that have structural damage and mold, or relatives waiting to rebuild. it will happen more quickly than the report says.

finally, i've seen some critics say what about mitigation? it is not a new thing, it is making sure the same storm damage happens again. we don't want to rebuild a tunnel so to same storm order can flood in. we want to build it better so there is more protection. when we tell homeowners to rebuild, we tell them to build a couple feet higher so the storm won't damage their first- floors and basements. that is natural. mitigation also involves putting in sand dunes and other natural barriers when there is another storm it doesn't do the same damage. right now there is no protection. so mitigation has always been done. i remember voting for katrina to move a rail line inland at the request of a senator. to build it by the shore it could be flooded again.

so it is a foolish view. we're going to work new york, new jersey, with our colleagues to debunk these myths and hopefully we can get support, full support from colleagues on both sides of the aisle so we can pass this bill next week. >> i want to talk about a bill that you referenced and the house is shameful inability to pass this important, critical bill. today marks the 232nd day since the congress has passed the act. 16 republicans joined with us to pass it. that was at a time when we saw a lot of partisanship in this town.

it's marks 232nd day of inaction by speaker boehner. they are insisting on an alternative measure that removes protection for tens of millions of women in this country. we should not be picking and choosing victims of abuse to help or ignore. frankly, i'm surprised to see them so adamantly opposed to supporting a women's act when we all know issues affecting women and families played a major role in the election. voters called for putting the protection of women before politics and ideology. answering their call should be beginning by passing the senate's bipartisan violence against women's act. who they love should never determine whether or not the perpetrators of domestic violence are brought to justice. women cannot afford any further delay, not on this bill. i hope speaker boehner and

republicans hear this today. they look at the letter that nine republicans asked for this bill to be brought up. we're not going back down, we're going to keep fighting. 232 days is inexcusable, actually, one day is inexcusable. the clock is taking a women across the country are watching. >> questions? >> republicans are saying this request lacks detail. >> there is huge amounts of detail. i spoke to a senator last night and we're getting him all the details. there is huge amount of detail. the administration, you may remember, the two governors's if you add their request it totaled over $80 billion. the senate took a week and half scrubbing it carefully and bringing it down to $60 million and the details are very available. >> have you had contact with the speaker directly and do you

think it might be helpful in this process? >> my office is open any time to the speaker, our staff has had some contact and he has not seen fit to advise the council. he is doing it directly with the president. i have talked to these three senators and others, i'm mystified that we haven't had significant movement from the republicans. all the president is asking, all we're asking is take care of the middle class and do something about the richest of the rich in this country. as i indicated with the poll

numbers around the country, more than 75% of the american people think we're on the right side of that issue. if we had some movement on that, the president said he is willing to take some significant action. we have a record of recognizing that is important. we have done more than $1 trillion of cuts without a penny of revenue. we have already done that. they keep talking about entitlements, we look at the affordable care act. we look at that. we took waste, fraud, and abuse out of medicare, extended the

life for 12 years. we're willing to take a look at cuts, we know we will have to do some. we'll be glad to do that, it is part of what we need to do. it is unfair to walk away from it. i'm not -- the state tax that is something we should negotiate. right now it is $5 million, 35% tax. these people john kyle and others who talk about how important this is haven't said a word about this to anyone. that is going to drop down to 55% tax. is that what they want? it is all in their hands. as i've said time and time again, to this day, the republicans have not identified five corrects of actual money. -- cents of actual money. they are talking in generality. we will do revenue. it is the same thing that the share, the super committee, the same problem they ran into, the same problem that boehner and obama had the problem there. same thing with biden -- they will not agree to money. the only people in america think

the richest of the rich should not pay more money are the republicans in this building. >> yesterday, you announced the new democratic committee assignments. would you support term limits? >> no. >> on this issue of bills that aren't getting passed. republicans, i think on both sides they have been saying that there is a lot of bills that the house has passed and come over here and not received votes. >> i can give you a long list of things we haven't done. hundreds of bills the republicans held up. when you have to every time you come to bill you have to have a motion to precede and it takes 10 days. it limits what we can get done here. >> are you going to bring any of those bills up here? >> sometimes a long time i guess. >> how confident are you with your talks to the republican that you can get the bills

through? >> obviously, we need the republican support. i'm confident that the democrats are very strong behind us. we're working on republicans and we're not there yet, that's for sure. we hope that they will be there, you know, every senator no matter what their party all the to think, what happens if a disaster strikes there area? do they want to say there should be offsets? do they want to say do a little bit now even though the needs are so much greater? i don't think so. i'm hopeful they will rise to the occasion. are you threatening to block it? >> thank you, everybody.

>> house speaker john boehner's discuss the meeting with obama as a frank talk. earlier he criticized president obama for not being serious on cutting spending and blaming the president for why both parties have not reached an agreement. less than three weeks before the tax cuts are set to expire for most americans and defense cuts take effect. this is about 10 minutes.

>> good morning, everyone. more than five weeks ago, republicans signaled our willingness to avert the fiscal cliff with a bipartisan agreement that is truly balanced and begins to solve our spending problems. the president still has not made an offer that meets those two standards. republicans have. while the president promised the american people a balanced approach, his proposals have been anything but. he wants far more in tax hikes and spending cuts. he wants new stimulus spending and the ability to raise the debt limit whenever he wants without any cuts or reforms. it is clear the president is not serious about cutting spending. spending is a problem. how big the problem? look at this chart. this line is the current baseline for revenue.

here, if the president got everything he wanted, over $1.4 trillion in taxes, this is what that would represent. if you look at the spending problem, you see it does nothing, nothing to stop the spending problem that our country has. republicans want to solve this problem by getting the spending down. the president wants to pretend the spending is not a problem. that is why we do not have an agreement. the chart depicts what i have been saying for a long time -- washington has a spending problem that cannot be fixed with tax increases alone. the right answers is to start cutting spending, addressing our debt, and paving the way for long-term economic growth. the white house is so unserious about cutting spending that it

appears willing to slow-walk the agreement and walk our economy up to the fiscal cliff. doing that puts our jobs and the country in danger. it jeopardize a golden opportunity to make 2013 the year that we enact fundamental tax reform and entitlement reform to begin to solve our country's debt problem and revenue problem. as you can see, real revenue growth is critically important as long as we have real cuts in spending if we're going to solve our long-term fiscal problems. the election was not a mandate to raise taxes on small businesses. it was a mandate for both parties to work together to take on the big challenges that our country is facing. republicans are ready and eager to do just that. we made a reasonable offer, and is now up to the white house to show us how they are going to cut spending and give us the balanced agreement that the president has talked about for weeks. if the president will step up

and show us he is willing to make the cuts that are needed, we can do some real good in the days ahead. if not, if he wants to keep chasing higher spending with higher taxes, this chart will look a whole lot worse, and our kids and grandkids are the ones that are going to suffer because washington was too short- sighted to fix the problem. >> several weeks ago, polls said that 75% of the public said that tax rates for the upper- income earners should expire. why are you holding out for tax cut for the wealthiest, when most americans -- [indiscernbile] >> raising tax rates will hurt small businesses at a time when we are expecting small businesses to be the engine of job creation in america. ernst & young has made it clear. if we were to do what the

president is asking for, 700,000 jobs would be at risk. it is simple. [indiscernbile] >> why is it every christmas we are doing this every single year, no matter what? >> we really should not be. i argued going back to the spring that this issue had to be dealt with. in may, the house moved a bill to replace the sequester with other cuts in mandatory spending. in july, the house passed a bill to extend all the current tax rates. i have been pushing all year for us to address this problem. here we are at the 11th hour and the president still is not serious about dealing with this issue right here. it is this issue, spending. you go back -- and i want to talk about polling, most americans would say that spending is a much greater

problem than taxes. >> [indiscernbile] >> unfortunately , that is the case we're dealing with today. >> would you say that you would categorically not put a bill on the floor to raise tax rates on any bracket? >> i do not understand the question. the law of the land today is that everyone's income taxes will be going up on january 1. i made it clear that is unacceptable. until we get this issue resolved, that risk remains. >> can you describe how it is to craft a deal at your conference with support while not jeopardizing your job as

speaker? >> i am not concerned about my job as speaker. what i am concerned about is doing the right thing for our kids and grandkids. if we do not fix the spending problem, their future will be rather bleak. >> [indiscernbile] >> they put spending cuts on the table. unfortunately, the new stimulus spending they want almost outstrips all the spending cuts that they have outlined. >> [indiscernbile] and people have been wanting to know -- >> there is no such law. >> after the election you said increasing tax rates was unacceptable.

you have been less definitive you say things that you oppose the idea and that is what he said -- >> i do not oppose the idea. >> [indiscernbile] would you permit a vote and couple that and -- >> ifs and ands and buts are like candies and nuts. my goal is to get to an agreement with the president that addresses this problem. >> [indiscernbile] >> i have no idea. >> leader reid is made it clear that he agrees with the president with the debt limit, giving the president the authority to raise that

unilaterally. does that complicate your effort, if they are united? >> if you thinks that senator reid, of course, then senator obama whichever, had given in to president george w. bush the unlimited ability to raise the debt limit -- >> they are talking about doing it now. >> do you think there is any chance that senator reid or then senator obama would have done that? zero. congress will never give up the ability to control the purse. the debt limit ought to be used to bring fiscal sanity to washington, d.c. >> [indiscernbile] with a $1.5 million [indiscernbile] do you support the idea of raising that --

>> if the justice department is not going to enforce the law of the land, the congress will. thank you, all. [captions copyright national cable satellite corp. 2012] [captioning performed by national captioning institute] >> later, john boehner went to the white house for a meeting with president obama. after that, he released a statement saying the president and the speaker had a frank meeting tonight that lasted approximately 50 minutes. there was no further news for details on the meeting. tomorrow, live coverage of a forum on increasing home ownership and the role of lenders, investors and policies

in reaching that goal. a conversation with the bank of american ceo will be followed by a panel discussion. that is live at 10:00 eastern on c-span. nancy pelosi urged lawmakers to first work on a deal that would avert the fiscal cliff and follow up on tax reform and entitlements next year. congress and the white house have three weeks before a they are set to expire for most americans and mandatory domestic and defense cuts take effect. this is 15 minutes. >> good morning. thank you for being here. here we are, eighteen days from a possible fiscal cliff, hopefully not; twelve days until christmas; and here we are once again having a two-day work

week in the congress of the united states. you have to ask the question: why are we going home instead of working very hard to forge an agreement to avoid that fiscal cliff? why are we not working very hard to pass legislation to address the needs posed by katrina? people out there are waiting to see if we can manage what we are doing. if we take christmas and engineer back in time, 'cause this is all about time, the most precious of all commodities because it can produce results, or not. if you take christmas and engineer it back from there, because that's a day, well, we won't be in session, we could engineer a path forward to say what can we do in that amount of time? we really have to come to some agreement in the next couple of

days, or the very beginning of next week, for us to have engineered our way to a solution. i wasn't trained as an engineer, but i admire their work because they find solutions. they make things work. they make things operate. and what we have to do is, is politically engineer a solution. if we agree that we will have a solution and that we will avoid the cliff, as i think we all should agree to that, then what are the steps we need to take? and how quickly can we take them? so that we at least have a week of consumer confidence that can improve. but we have a week, as the year comes to an end, where the markets have the confidence to go forward. so far they trust that we would not be so stupid as to go over a cliff. the markets have reflected some optimism, i believe, in that

regard. but the consumer spending, as you see by some statements of ceos ceo of walmart for one that the season is not as, what was hoped for in terms of consumer confidence and consumer purchasing. we're coming down to the wire. it's, you know, a matter of days. last week we went out on wednesday morning. this week we'll probably go out on thursday morning having come in on tuesday. two, two-day work weeks in a row. this is just not right. how does this make sense when time is of the essence while the clock is ticking? and, again, we're coming down to the wire. and just to be clear: democrats have said we've already agreed in the budget control act, and in other legislation passed by this congress, to a $1.6

trillion in spending cuts. we already have agreed in the affordable care act, and in the president's budget, to over a trillion dollars in savings in medicare to be plowed back to strengthen medicare and to increase benefits but to strengthen it. and it just remains for the republicans to agree to pass the middle income tax cut which gives a tax cut, by the way, to 100 percent of the american people for people making over $250,000 a year, they get a tax cut up to $250,000 a year and are asked to pay a little more beyond that. this is all about confidence, consumer confidence, market confidence; it's about creating jobs and growing our economy. chairman bernanke, who sort of coined the phrase of the cliff, has said that if we don't act, and we should act as soon as

possible because there's already a slope here, if we don't act the economy will go over the cliff not just our budget process the economy will go over the cliff. what more motivation do

what more motivation do our republican colleagues have then to get the job done, to manage the issue, to engineer a solution so that we can go forward? it'll be two stages. this year we'll deal with the spending and the issues that i mentioned earlier. and next year we can take a bigger issue of reforming the tax code, closing loopholes, perhaps lowering rates for individuals and for corporate america. that's a longer endeavor. and also to look at how we increase savings from the entitlement side of it. so, the speaker had proposed a

two-step process. let's take step one as a big down payment, then we go to step two, to some of the reforms that we can subject to scrutiny to see if they really do save money, if they do create jobs, if they do reduce the deficit, if they do grow the economy. any questions? >> madam leader, you talked about comprehensive tax reform >> i said katrina, not sandy. i was still thinking of katrina. we have to address the needs. and if i just may say that, thank you, whoever just put that there. was that you? we had to do this before, where we had an impasse with a disagreement with the executive branch and the legislative branch. at that time, it was katrina. but the important message every day that we didn't pass something for katrina really caused great apprehension in that region and with individuals living there. and it is the same thing with sandy. where is the confidence they will get if they see we want this little bit now, and maybe this little bit now, and you can't spend that now? no, it's not about only what can you spend now; it's what you can plan on now. so, the timing is really important for sandy, as well, as it was when we had a similar impact because of the iraq war that people were concerned would hold up the katrina funding. yes, ma'am? >> speaker boehner said there's no point in raising tax rates for the top two percent, including some small businesses, if you are just going to turn around next year and do comprehensive tax reform that perhaps lowers everyone's rates. what's your reaction to that? >> completely upside-down. his statement is an argument for decoupling middle income tax cuts and higher income tax.

we all agree that we should have a middle income tax cut. decouple it. put high end tax cuts on the table when we review comprehensively how do we get additional revenue to reduce the deficit, how do those decisions affect investment and growth and creation of jobs? so, i take what he said in the complete opposite way. it argues for putting it on the table next week, next year, so we can justify its existence because there is no justification right now, no justification, for a higher tax cut that reduces, that has not created jobs and increases the deficit. that's what it has done for the years it has been in effect. yes, sir? >> the speaker has said that he has gotten no specifics from the white house about what spending cuts they would entertain other than what's in the budget, and he wants significantly more spending cuts to get more revenue. is he asking for something that is politically impossible for the president, who campaigned on protecting these entitlements? >> no, he's not. in fact, the fact is that i don't know if that's a reason, an excuse, or a stalling action, but it's not a serious statement.

the fact is go to the table, debate it out, come out with a product, manage the issue, engineer a solution but don't make up excuses as to why we are working two days a week this week, two days a week last week, the week before that, thanksgiving. thank god we were able to be home for that. we don't know if we will be home for the rest of hanukkah or christmas. but that's just totally the republicans sent a letter, perhaps you saw it, it had a number in it, it had no specifics. it had no specifics. the president has been very specific. if you compare what the president has put forward, i would need something this high

for you even to be able to read the finest print. it would be this high, is what the president has put forth in terms of specificity. the republicans put out a letter that had more signatures than it had ideas, and it had, like, one number. so, let's get real. let's really get real about this if we are going to have a solution. and let's stay here and sit at that table and call you know, make that charge, okay, here are the president's cuts. have you seen the president's specifics? >> yes, i've looked at them. i mean, the question >> so, why do you, i mean, the president has been very specific. do you not agree? >> my question is not so much specificity as, is their demand for even more cuts than what he is offering politically impossible for the president? >> well, that $1.6 trillion? $1.6 trillion? at some point, you are cutting the seed corn of our future. the president wants investments in infrastructure. he wants education. he wants job creating

investments for the future. you're not going to reduce the deficit by only cutting your way to it because you will cut the prospects for job creation, which produce revenue. so, i know that you've all seen the president's specificity. so, if the question is they want more cuts, then that's a different question than they want specifics from the president. but the president has been very specific. in all of it, the president has said, i am open to having a discussion about this, but let's just, you know, let's just all take a deep breath with this

thing. the back and forth is only useful if it enhances understanding. the back and forth is only useful if it eliminates possibilities. as i have said, don't even think about raising the medicare age. we are not throwing america's seniors over the cliff to give a tax cut to the wealthiest people in america. we have priorities on that. but, again, on all these other

things, go to the table and negotiate. yes, sir? >> madam leader, $600 billion is where the president has been on entitlement cuts. that's something he hasn't moved on. >> six-hundred billion dollars? >> six-hundred billion dollars, i think, is the number that they've put out. is there any upward movement, potential for upward movement in that? >> four-hundred billion dollars is what i had heard, but >> well, $400 or $600, is there any room to go further? >> i think that, that should be left until next year when you look at what this is. i mean, if you are collecting trophies and you want a scalp in order to if you want the scalp of seniors before you will touch one hair on the head of the wealthiest people in our country, what's the discussion about? are we serious about what we do to have the pillars of our society, in terms of economic security for our seniors and their families, protected? then that's a longer conversation about where to go. i have said over and over, if you want to talk about social

security, having it on the table, it's on its own table. any savings from social security that can be created should stay to strengthen the life of social security, not to give a tax cut to wealthy people and call that deficit reduction. >> madam leader, you said that markets so far have been fairly confident that there's going to be a deal here. >> i'm just thinking that, that must be why the markets are doing so well. >> and i think that's what most market people suspect, as well. what should markets be looking for as clues as to whether or not we are going to get a deal, or not get a deal? >> well, i think that, first of all, when we met with the president, the four leaders met with the president, we talked we came out with fairly positive statements because we talked about that we wanted to avoid the we agreed that we wanted to avoid the cliff, that we knew that there had to be the elements of cuts, of addressing the entitlements, and having revenue. the speaker suggested, and most of us agreed and had our own versions of the same two step, which was that we'll do a down payment now, which will be significant, and then to go to another stage where we would do things like tax reform fairness, simplification, loophole closing, lowering of rates, whatever you could do in a comprehensive way, not just taking one thing, but in a comprehensive way and also putting on the table how we strengthen medicare, social security, and the rest of that. so, my understanding from those who had visited our offices, they understand that we have to have revenue. and what we had hoped from that few weeks ago meeting was that

we would see milestones along the way with a reasonable timetable to as business works and says, what are your goals, where is your timetable, where are the milestones for success, that we would have seen more by now. because, again, the time is growing short. so, i think that a comprehensive, big, bold, balanced which we are perfectly capable of doing initiative to avoid the cliff as a starter is what they tell us they would like to see. >> so are markets getting it wrong, then, so far because we haven't seen those milestones that you're talking about? >> well, hopefully they're not. hopefully we will have that. and, again, as we get closer to the time why it has to go this long, i just don't know. >> madam leader? >> but i think we have to go because the speaker has his press conference about now. you had one yesterday. yes? >> leader pelosi, you've been resistant to any major entitlement changes, but the president in his last negotiation with the speaker did agree to some pretty major changes. are you worried that as this goes forward, if there is any progress in negotiations, that

he will agree to some entitlement changes that you can't get your democrats to support? >> let me just remind you that we, in the affordable care act, had savings of over $700 billion by slowing the increase of costs to medicare. so we took the first step in this regard. the president has several hundred billion dollars more in his budget which we fully support. the president knows our views, shares our values, we respect his leadership, and the speaker may need our votes to go forward. so, i am confident about how the president is leading us. thank you all very much.

>> peter predicted that republicans will ultimately caved in on tax increases. this is 15 minutes. medicare costs will grow less than 3%, which is unbelievably low by historical standards. or that we saw last year. in a continuation of a value- based health-care system. over time, it offers the best

opportunity in take-home pay that has arisen over the past decades because of globalization and technological change. the third production is more dire with regard to health care, life expectancy for the bottom 30% will decline. this is part of a longer-term trend in which there have been increasing gaps in life expectancy going up very rapidly. at the top of the education, going up more slowly, declining at the bottom. that is combined with an odd feature that has the economy's slowdown life expectancy tends to improve, and life expectancy tends to not rise as rapidly in aggregate, which is the odd finding in a variety of studies. as the economy continues to pick up, that will unfortunately

mean the underlying trend in life expectancy for the bottom 30% will not be so great. final prediction, the top tax rate will rise to 37% for one taxpayer. [laughter] the long-term fiscal gap the nation faces will remain above 5% of gdp. it currently is hovering something around 7%. i think the risks of that prediction, by the way, perhaps we will get to this, i think the administration has a lot of leverage to obtain a some tax rate increases and the concern over the fiscal cliff is overblown. it should be shifting to the debt limit. it is entirely possible the administration will win on the fiscal cliff and face a debt limit problem. >> a very good. that is where i was going to

start. tell us what happens in the next few months. how does the beginning of 2013, do we go over the cliff? is there some agreement before the end of the month? >> i think there will be an agreement. the reason is, on that point, and might entitlements, the republicans have put themselves in a box that is not tenable. to argue that there shall be no increase in marginal tax rates for anyone opens the possibility for a machiavellian democrat -- chuck schumer comes to mind -- to say here is my proposal, we will raise marginal tax rates to 35.5%. are you really going to blow up the deal over that? if you do, you are committing political suicide. the fact that, combined with a lot of outside pressure is being brought to bear on that

question, the republicans will cave on that question. the problem, however, the administration is now jamming them on that and also on a debt limit increase. that may be overstepping. one possibility is to republicans cave on the marginal tax rates. there is a fiscal cliff deal but they're not ruling to raise the debt limit. >> what about another part of it, what happens to deductions? >> i think it is likely there will be some tax expenditure process. if you have a marginal tax rate increase that is less than

39.6%, there will be some limit on deductions or some process that will fuel in the details on how to limit them. details over the next 9-12 months. what basically will happen is they will be aiming for eight trillion dollars in revenue. they're not going to be able to feel that through the marginal increases because they will be smaller than what the administration is proposing. they will fill in the difference by cutting back on tax expenditures to. >> we are going to open the floor in just a second but one more, unemployment below 7%. one week ago i would have said it was even more optimistic. >> i made it before friday.

>> and you did not adjusted. the economy did well. do we end with the view that the u.s. is the best performing of the advanced economies? >> the u.s. has a pretty good medium-term growth prospects. both because of the energy boom, increasing efficiencies and healthcare, and still being the world leader in technology, which is a big advantage. the other point that i think needs more emphasis, if you look over the next 10-20 years, the growth rate of the economy is slowing because of demographics, because the average education is not increasing and we will have the drag from the aftermath of the financial crisis for a long time. the next year or two or three looks better than what we have been experiencing that better means 3% growth, not 5%. >> on that note, are there any

questions? no questions? i have loads more. >> [inaudible] >> can we continue to print money without causing inflation? >> one of the most challenging lines that the next chairman of the federal reserve will have to walk is unwinding the balance sheet expansion that has occurred while avoiding putting too much negative pressure on the economy. you can get that balance wrong. my own view is that that is a much smaller risk than the risk we wind up with with very slow growth for a long period of time. reason i think it is a risk but

not the dominant one is that while the economy remains weak, which i think relatively speaking, will for a prolonged period of time, it is hard to spark inflationary pressures. the u.s. does not have high unionization rates. so even if you had an initial spark of inflation, it is much harder for it to take hold. not impossible. a lot comes down to the credibility of the federal reserve in saying we will not allow that to happen. that credibility could be endangered if they wait too long.

>> something to worry about, not in 2013 could you have to come back next year and the year after. another question? yes. gentleman right there, five rows back. the microphone, just coming in. >> do you see areas in increasing untapped productivity? >> we still have massive untapped productivity because we are not using all of the plan equipment and workers we could. that unemployment rate is still elevated. there are millions of workers that could go back to work if there were demand for what they could produce. that is the biggest hits.

not only today it also overtime because of they do not get back to work now, they may never come back to work. the second thing is if you look at where we are inefficient. the reason i am glad there is a panel on health care is that is by far the biggest area in which productivity improvements are both possible and beneficial. estimates suggest that we spent $750 billion in health care that to not improve outcomes. that could go into take-home pay, raised outcomes. wheat need to be tackling the problem as aggressively as we can -- we need to be tackling the problem as aggressively as possible. we are on mile two of the marathon.

>> your second and fourth predictions which is, we need to be upbeat on medical cost control. 3% is much slower. you said the fiscal gap would be 5%. >> we have not solved the fiscal cliff. >> i should have said, as estimated by the congressional budget office. >> it is not my prediction? >> cbo will not take into account the slowdown in health care costs for a very long time. >> the bigger picture -- it is the slowing of health care costs enough to rid whatever tax or entitlement deal you expect next year for us to be able to say at the end of 2013 we fixed it medium term? >> not really. the first is that deceleration in health care costs is still in its infancy and it is too soon to conclude that it will persist. the second thing is that the revenue base that both sides are looking into. let's say we raise the marginal -- raise the marginal tax rate to 37%. that revenue base for 2020 does not work. the revenue base is too small. this is what both sides are agreeing to caps on discretionary spending because they want to hit a deficit target. the revenue base is inadequate to hit that target. so they rely on basic with a gimmick to get there, which is we promise we will cut spending by a certain amount but we will not tell you how. >> very washington. we have got time for one more question. yes, gentleman up there.

>> i have a question about, you said there are factors -- about economic recovery. i am wondering about student debt and how the burden will play into the economic recovery in 2013. >> it is part of a broader question. we are most, not all the way through the deleveraging question. that has been a significant hindrance to economic growth. private-sector debt skyrocketed and has only slowly been coming down. if you look at aggregates, household and nonprofit debt as a share of disposable income, it is most of the way back to pre- crisis levels. with regard to student debt,

specifically, that is a particular area of stress. i would come back again and say, one of the reasons why we are seeing very dramatic increases in tuition and -- at a public university is that state appropriations at the state government level for those institutions have been curtailed. that in turn ties back to rising health care costs through medicaid. we are looking at the symptom here, which is the unsustainable debt levels for many students. the underlying cause is the government level that no longer sustains the low tuition levels that were the case 20 or 30 years ago. >> we have 12 seconds.

we are going to have to stop there. we can conclude by saying it was -- glass half full or half empty? >> half full. much better than it has been. relative to the last three years, 90% full. >> thank you so much, peter. >> up next on c-span -- >> friday morning on "washington nina olson." then, sarah kliff. live starting at 7:00 a.m. eastern on c-span.

>> i wanted to explain how totalitarianism happens. we know the story of the cold war. we have seen the archives that describe relationships. if roosevelt, stalin, churchill, truman. we know the main events from our point of view. we have read and written them. i wanted to show it from a different angle, from the ground up, what did it feel like to be one of the people who were subjected to this system. how people make choices, how they react, how they behave. one of the things that has happened since 1989 is the region we used to call europe has become very differentiated. they no longer have much in common with one another. >> more with anne applebaum

sunday night at 8:00 p.m. on c- span's "q&a." next, grover norquist was on this morning's "washington journal." this is 40 minutes.

host: someone who's been in the news and on the news lately is on your screen now, grover norquist, president of americans for tax reform. mr. norquist, make your case for no tax increases at this point in our economic situation. guest: two years ago president obama extended all of the tax cuts that lapsed in janurary. he did so because he said the economy was weak and raising taxes ordered. the economy is not any stronger now than it was. in addition to the tax increase, he wants to impose by letting some of the bush tax cuts laps, he has already got a trillion dollars in tax increases that starting in january to pay for obamacare. when you think about fiscal cliff, the bush tax cuts have collapsed, sequestration cuts spending, and then there's a trillion dollar tax increase that obama has over the next decade to pay for obamacare. interestingly, he decided to delay those taxes until after he was reelected. but they start kicking in in january. very painful and hit the middle class hard. the reason not to raise taxes is to have a spending problem. we spent too much money. raising taxes is not part of spending less. it's not part of a compromise or anything. it is what politicians do instead of reforming government. europeans eventually put in energy taxes and that is what obama is doing. he spent his five trillion dollars in the first term and

wants to take us a trillion dollars more in debt over the next decade. there's no way to raise taxes to pay for that. we have to rein in spending. raising taxes is what politicians do when they don't have the courage to reform government. host: you can read this new press release on the internet. canada and middle-class families face high medical bills tax under obamacare, it says. here's the pledge you have heard so much about brokest request sent to members of congress. mr. norquist, there's no mention of spending in here. but you do mention the elimination of deductions. that is one of the issues on the table now is changing the tax system, eliminating some deductions. if they are matched by spending cuts, does that work for you? guest: the pledge's focus is on the tax issue. until you say no to tax increases, historically, politicians never look for spending restraint. in 1982 they said ronald reagan let's raise taxes and we will cut spending. they raised taxes and spending did not go down. it went up. then they went to bush eight years later, who learned nothing

from reagan, and they said we will give you $2 of imaginary spending cuts for every dollar tax increase why not offer them $10 in imaginary, since it is all imaginary? he was offered $2. spending went up and not down. so we have played this game before. politicians who want to spend more money say we will cut spending in return for tax increases. they take the tax increases. because of that, you have to get to spending restraint. the 50 states have made a commitment not to raise taxes. those states that don't raise taxes, texas, florida, reform government. those states where taxes are on the table, maryland keeps raising taxes and spending like crazy. illinois keeps raising taxes instead of reforming government. california just decided to raise taxes instead of reforming their pension system.

so the states are divided into those states that don't raise taxes and are reforming government. those states that to raise taxes that don't reform government. host: the first call, joe in georgia, republican line. caller: peter, i think grover norquist is the greatest taxpayer champion in history. we love him in georgia. we totally agree with him. we think the answer is electing more people like tom price. my big question is i think a lot of john boehner, and he's been there 22 years. a lot of us in georgia feel tom price ought to be elected speaker. he would be much more aggressive and would not capitulate on taxes to obama. what do you think of tom price being speaker? grover, you are a national hero. but you are exactly right on taxes. god bless you. guest: thank you. very kind comments. all the republicans in georgia in the house of representatives have been stalwarts in opposing tax increases. neither of the republican senators have voted for a tax increase. congressman price is a great

republican leader and a great conservative leader. i point to john boehner's success over the last years in holding all the republicans together not to oppose the stimulus package where obama and nancy pelosi put tempting cash on the table, other people's money, and the setup which congress person would like to take some of this home and spend it? some republican appropriators were tempted to do a little shoplifting, but everyone of them decided not to. not only their own internal good behavior helped on that but the leadership from john boehner in explaining that if you want to go to the american people and change the direction from the tax and spend that obama was moving people into, you cannot have your finger prints on the murder weapon.

you cannot engage in that sort of tax and spend policy and then go to the american people and say trust us because we do it better. you really have to make the difference clear. i think that he's done a pretty good job of that. everyone can improve. i know the republicans in the house are working with john boehner to make sure they have the strongest position against obamacare and his taxes and regulations and against the eight overspending of the last four plus years. host: are you in contact now with the speaker? guest: i work with all the leadership in the house and senate. that has been for the last 20

years. always in touch and trying to be helpful. they're all pretty good on taxes. host: in virginia, phil, democrat. caller: hi. i have a couple comments. i don't think it's fair to say that reagan got spending cuts. let me go to my main comments. i have heard increases in the marginal tax rate may actually be good for hiring and increasing itemized deductions. an increase in the marginal tax rate at the top end would make an itemized deduction and additional hiring more valuable to a business, for the value of that charitable deduction, the additional hire. if a company is just a little bit over a the threshold and wants to take a deduction to bring in additional men, then it's worth more to him. host: let's get a response. guest: there are several approaches. there's the personal income tax. many small businesses pay the personal income tax. it is subchapter s corporations. obama plans to take taxes on small businesses at 43.4% top rate from 35 today. like ibm and other corporate entities, that's 5%. they don't plan to raise that.

there's a move in the united states to try to reduce that to 25%. the reason is the average business tax in europe is 25%. like france is not where we want to be on tax policy. the canadians are at 17%. where you have high marginal tax rates, it slows economic growth. you can see it on the corporate side and on the individual side. we will over time take the corporate rate to 25 from 35. because it will be better for growth, we will actually have more revenue for the government and not less. with government growth at 4% per year, reagan levels, versus 2% per year, france over last 20 years or obama over last four, you do that for decades, the federal cabinet raises $5

trillion in additional tax revenue. the best way to get revenue for the government at such strong, robust and jobs-creating economic growth. unfortunately, president obama and the democrats have taken the opposite direction over the last four years. that's why we are in this mess. host: now to al, an independent in georgia. if i would push the right button. sorry about that. al, good morning. caller: good morning. the last time you were on c- span, i managed to get through. it was on the heels of you going to atlanta and to chastising the legislature here over transportation tax. guest: how did george a vote on that? caller: nine regions out of 12 voted it down. unfortunately, the one that i am in voted it in on the heels of support by republicans. that's why i have a bone to pick with you this morning, grover. guest: i urged people to vote against that tax increase, because i knew they would spend

money on [indiscernible]. caller: the guy on before me called you a carpetbagger. guest: i'm from boston. host: what's the bone you want to pick? caller: in the 12th district we had a guy who voted for that tax increase and voted for the hospital bed tax, in the legislature. he got an aide% republican advantage in the 12th district. those of us who consider ourselves real conservatives had to go out and overcome that eight point differential and we managed to defeat anderson by eight points. guest: what did you get stuck with? caller: our region was one of

the three that voted for it. guest: anderson had the tax increase. republicans to raise taxes as young politicians have to live with the fact that it goes on with them the rest of their lives and their capacity to govern rather than raise taxes follows them forever. it is a mistake. don't raise taxes. speak to and politicians, shape them sternly. don't raise taxes, young man. this is not considered a useful quality. it's not like smoking marijuana once or twice. it is a social disease. don't raise taxes --ever. host: grover norquist got his degree from harvard. you already have the protection pledge for the 113 congress, the incoming congress next year. 219 representatives and 39 senators have signed that. a couple of them have been making some noise right now. i want to get your reaction.

saxby chambliss has signed this. peter king has signed the pledge for next year for new york. speaker john boehner has also signed this as well. 16 gop members of the house have not signed for the next congress. 6 gop u.s. senators have not signed. what about saxby chambliss and peter king? guest: saxby chambliss has not voted for a tax increase, to be fair. you can criticize him for public misstating the impure thoughts, and he has not voted for it. what he has said in georgia last sunday, that he would consider reducing rates and broadening the base and taking 15% of the higher taxes and spending that, paying down the debt with it. so there would be a tax increase, a middle-class increase, after you dropped rates and broaden the base. since the modern democratic party is dead set against reducing marginal tax rates, he has laid out a set of conditions that will never be met. the south carolina and instagram has also said if you give $10 of entitlement form that cannot be revoked, he might consider a tax increase. it would have to be your vocable.

obama is offering a for "new york times as much in tax increases as phony spending cuts. the opposite ratio of what they cheated reagan and bush with, he's trying to cheat mitch mcconnell with. almost no spending restraint at all. i understand why some people think out loud about hypothetical. the challenge is for those republicans who say i might do this if you did that, is the new york times takes the first four words in your paragraph, "i might raise taxes" and they put you in the category and they don't listen to the serious

and sophisticated comments of what some of the congress people have said about this large a spending cut. so, tactically, it's a mistake. nobody here is the spending cuts you are talking about, because you get cut off after you say "i will raise taxes." end of conversation. they put you on the tax increase list. it's not fair to some of those guys. the good news is, these are the same people who two years ago made the same, we were doing the budget control act with the debt ceiling increase. "we might do this." the republicans did not do that. i think we are in very good shape in terms of keeping people who have made their

commitment to the people of georgia or south carolina and making sure it to have them keep the commitment. one of the things that sometimes confusing is harry reid, the democratic leader in the senate, likes to give speeches suggesting that the pledges to me personally. he should read it. it is to the people of your state. as long as you are in the house or senate. it is very clear. it is binary. the people you have to talk to on this issue are the people in your state. a republican just one in nevada defeating a liberal democrat harry reid was supporting. nevada is sending a message to harry reid, please knock it off with the tax hikes. host: senator tom coburn, here's what he had to say recently -- guest: tom coburn said the exact same thing two years ago. we have long conversation,

phone. he said we are trying to get a $2.5 trillion spending restraint. john boehner has said and reiterated that we have not focused on the debt ceiling sufficiently, he has said you have to cut spending if you want to raise the debt ceiling. tom coburn thought you had to raise taxes to support that. he was wrong. we got the spending restraints are written into law, because we took tax increases off the table. tom coburn went into the gang of 64 months and months and had to walk out of the room because dick durbin and the democrats were not willing to reduce spending. he had to call me and say that i was right and he was wrong.

in his conversation with dick durbin he learned that they're not interested in cutting spending. only when you take tax increases off the table -- and coburn's strategic thinking was just flawed. but after understand where the other team is coming from. if you put taxes on the table, they cannot focus on any thing else. i don't even see or hear your conversation about spending. you talk about the obamacare medical tax earlier, we just put this out on our website. obama is now born to a tax starting date refers to, low income people who have high medical bills. that is one of the groups paying for obamacare. right now, if your medical bill, out-of-pocket medical bills are over 7.5% percent of your income -- and it's mostly low-income people -- the average person that gets hit by this makes $50,000 a year, you can deduct that from your taxable income when you pay taxes spirit

saves a lot of money for a lot of taxpayers. obama is taking that to 10%, which means billion millions of americans who are sick and have extraordinary health care bills are being taxed by obamacare. it is a hidden tax. nobody saw this tax until january 1, coming up. obama did not run ads saying i'm going to tax sick people to pay for my program. yet that is what is hitting on january 1. add to that if you are missing a leg and need a prosthetic device, obama has a tax on that. if you need a pacemaker or a stent, there's a tax on that. all medical devices are being hit with an across-the-board tax that is supposed to reduce the cost of health care. it raises the cost. taxing middle-income very ill people with serious medical bills and he taxes everything used in hospitals such as medical devices. why did obama and harry reid and nancy pelosi continually delayed these tax increases

until after basically got reelected? now there are 17 democrats who have bravely sent a letter saying could we delay this tax increase, because it will kill jobs in my state because we have people who manufacture pacemakers and such?

so they voted against it before they wrote the stern note. they voted for it before they wrote the sternly written notice against -- i'm remembering my john kerry back-and-forth. but this is very damaging to our health care system. host: in new orleans, on our republican line, go ahead, eustice. caller: this is a capitalist country. taxes are never going down. the everyday people, a lower class, it seems the republicans are fighting for the middle class and the rich. the reason why they lost the election is because of the lower class. you have to start thinking about the 2016 was going to happen. obamacare seems to be helping out the lower class. a book called "let my people go," is a really good book to let black people know where they stand in the economics. it's a really good book. host: i will get the book from steve. thank you for that. guest: when you were talking about obamacare, and you need not to read the press releases that obama puts out about what it is supposed to do. you need to actually look at the tax increases in it, the regulations in it. the next 4 years will be very ugly when it comes to economics. all the ugly parts of obamacare that he did not want you to focus on, those take place over the next four years. the things that he thought people would appreciate, those

have happened already. those are the ones they spoke about before the election. we are now seeing the tax increases. this is not going to be free. there are massive tax increases that i just talked about such as medical devices. they are raising taxes on six people. average income of $53,000 a year, they would get hit by a tax increase on people with high medical bills. atr.org has the right up on it appeared there are five obamacare taxes that will hit january 1. that is the real permanent non- moving fiscal cliff bridge abutment that we will run into in january. host: madison, wisconsin, a democrat, joline. caller: good morning. i called to thank you and the republican party for causing the people to rise up and vote. i have never seen so many young people that stood in line to vote. you could not win all the attack money that you spent. your party puts us in this situation under bush. thanks to you, your party will not occupy the white house for the next three years grow up and accept that this is a new day. your party will not occupy the white house for the next 20 years unless you grow up and except that this is a new day. guest: ok. regis had an election and a lot of people voted -- we just had an election. they voted twice for the ryan plan which reduces obama's debt. it does tax reform and takes the corporate individual right the 25%. the democrats in the senate have avoided voting on a budget for 3 or four years.

patty murray runs the committee to write budgets. it was all politics and no governing. joe lieberman was complaining about his own party a few minutes ago. there are 20 democrat governors. wisconsin has a republican governor and a republican house and senate. 13 states have a democrat governor and a democratic control of the congress. the senate elected a majority of people that hid from the american people what their policies were. if you can get elected by putting your position, it is hard to argue you have a mandate. obama's budget was put up for a vote in the house. the republicans put up a vote. this is the policy obama claims he has a mandate for. there was a mandate and it was in the house of representatives. neither the president or senate

late out a budget as the republicans did. it would be nice if there was a budget and maybe patty murray could try and govern for a while. harry reid may want to do the same thing. then we could have a discussion. these negotiations between speaker boehner and obama need to beat on c-span. what is said, the american people need to see. it is no good to have secret meetings. let's have c-span cameras there. when there is an agreement, put it on line so every american can read it. obama promised big things would be done on c-span. he has the opportunity to make this promise, to keep that commitment. he promised he would put things on line so they could be read before they got voted. as long as americans can read

the bill, i think we will avoid raising taxes on the american people. we have to go after the obamacare taxes and get rid of those. host: richard from florida. caller: good morning. you are a popular and you can talk to just about everybody. the office of management and budget puts out a book. we could save $900 billion a year getting rid of duplication and fraud and this is in the book. instead of doing all the taxes and other garbage, let's go through this book and do our job. it seems you are the only one they are listening to. this is insane. we give you a dollar and they spend $15. host: we got your point of view. guest: several good points. there is a list of spending restraints. a number of lists -- heritage -- and americans for tax reform

has put together a list on a number of ways to reduce spending. we need to focus on making government more efficient. but start by focusing on some of these lists of ways to reduce savings. all the conversation about tax increase crowds all efforts to reform government so it costs less. host: this from the associated press. it jim demint was on cbs this morning and this is a quotation. guest: he is pointing out that obama appears to be pushing us over the fiscal cliff and that taxes will be increased automatically for obamacare. obama promised he would not tax the middle class.

he didn't exactly say the truth when he ran for office and when he passed obamacare. we have massive tax increases. politicians say they will raise taxes on the rich and then they raise taxes on everybody. an example is the alternative minimum tax. you don't tax municipal bonds. that group to where it hits 4 million people a day.

it will hit 30 million families.

that is how a tax on the rich leads into a tax on 30 million people. when the republicans passed the tax cuts, democrats said they were tax cuts for the rich. 80% of the tax cuts goes to the middle class and it is awful to let that lapse. they voted against the middle class tax cut but now they want to keep it. we need to monitor how this goes.

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>> thank you. good morning, chairman, members of the subcommittee. in this position i oversee the medicaid program and i also served as chair of the board of the maryland health benefit exchange. yes are grateful for the opportunity to speak with the about the implementation of the affordable care at in maryland. i am also a pediatrician. i think i am the answer to their sesame street question of which one of these is not like the other. my testimony today will include one background on the key elements of maryland's health care system and improve access to care and cost control to a description of how broad engagement has guided implementation of the affordable care act, 3 details on how

maryland is customizing the tools in the new law, and a summarized -- a summary of the health-care implementation in our state. first a little background. maryland has pursued innovation and health care financing to expand access to care, control costs, and promote growth. a unique approach to a hospital payments, a small group market that serves more than 400,000 marylanders, a high risk pool, health of permission exchange that includes doctors having access to help patience with records. the medicaid and the chip program that covers children up to 300% of the state poverty line and expanded to include parents with incomes up to 116% of poverty. i came on board a couple of

years after that expansion, and i met more than 97,000 maryland parents who were covered. it allowed them to get back to work and to get over injuries that had happened. i met one who said that because of coverage, now if i have to pick up a prescription, if not, i will not have the money -- will have to take it away from groceries. hearing that from somebody were they do not have to take money from groceries to pay for health care is something that we deal with all of the time at the state level. i think it was the legacy of expanding medicaid and having it be positive for the state that overshadows the implementation and what happened right before the affordable care act passed. the second thing i would like to talk about is public engagement. from the day after the affordable care act was signed, maryland has been working with

hundreds of interested people from doctors, hospitals, insurance brokers, businesses, and other carriers to design and think through how the set of tools and work for the state. that is included in early consensus, that it made sense for maryland to operate its own exchange, expand medicaid, and take advantage of other options within the law. there was wide understanding that the various aspects of the law included allowing kids to stay on their parents coverage, including access to prescription drugs, provide greater benefits to the state. there was a major report in 2001 that led to the exchange getting established in the legislative session. there are nine members of the board including six public members. we have had more than six advisory committees with all sorts of representation and engagement across the state.

they have met dozens of times. we have had numerous public sessions. that led to a second law that passed in 2012 that showed how to structure the exchange. we have made multiple decisions to tailor the lot. these include allowing insurance brokers to continue to be paid directly by carriers like they are now selling adult dental plans as an option for participants, designing a consumer portal for access. today marylanders can send a text message to be notified when coverage is available. we have been customizing medicaid including women to

become newly eligible for medicaid to stay on their private plans while having medicaid dollars pay for premiums and making all of these decisions, there are many more in my written testimony. we have had tremendous reports as part of the regular process they use with state officials. that is extended across the development of an i.t. system that we have been working on for the last two years. it will be a leap forward for the state for access to care and coverage. there was an independent analysis from the university of maryland on the impact of health-care implementation in maryland. the study found implementation with been s. -- benefited the state economy by $23 billion per year. benefits the state budget by more than six cinder billion dollars in 2020 through a series of mechanisms that are described in the testimony and what generate more than a hundred million dollars of tax revenue for economic activity.

it exceeds the stake cost of medicaid expansion. i go around the state talking about all of the work being done and people do not ask me about the rules and the guidance and our decisions, they ask me about when health is coming. we are excited for this to launch next year. >> we will vote there is a vote on the floor. i think we have time for a doctor allison to go on with your testimony. >> thank you, mr. chairman. i and the medicaid director in arkansas and the president of the national association for medicaid directors. appreciate the invitation to arkansas and other states represented on the panel to hear about the important issues. my written testimony that i have written addresses the two main challenges medicate faces today. first is the fiscal arrest brought on by long-term rates

of growth in the medicaid program, and also by the loss to the tax base suffered as a result to the economic shift that occurred in this country beginning in 2008. the second challenge is really an opportunity. the option for a state created in the affordable care act to extend health insurance coverage to poverty level adults through the medicaid program. i want to focus my remarks on the decision arkansas faces about whether to take up the option. and the governor expressed his support for the medicaid expansion this summer. it came after cms confirmed the expansion remains optional and can be revoked in the future. his support is driven by the benefits it would still provide to state taxpayers, to the safety net, especially hospitals, and to the beneficiaries of the expansion themselves. arkansas has many low-income,

uninsured adults and we know that medicaid saves lives, improves health, and it provides financial protection. the decision on whether to expand medicaid now rests with this general assembly. beginning in january for three months, a super majority of 75% vote is required to appropriate funds in arkansas regardless of their source. this is a challenge. the decision may rest heavily on the financial implications of expansion for the state. arkansas estimates the size of the expansion used as a starting point, to the estimates arkansas added cost and enrollees. it included some out of private insurance, included the woodwork defect. current eligibles represent 14% of the expected new enrollment. it also includes the added

administration cost. it rose cost about $900 billion per year, including federal and state payments. they are also expected savings for the state of arkansas associated with the expansion. the first stems from our expectation that a number of population is currently served through traditional medicaid will migrate or will transition into the new expansion group of eligibles qualifying for a much higher federal match rates. key examples are individuals enrolled in medicaid because of pregnancy or they have suffered a catastrophic medical event. in the future these populations will already have health insurance, and there will be no reason for them to switch to the old eligibility categories that carry a much lower federal match rate. the second is a reduction in spending on uncompensated care.

more than 200,000 additional arkansans will have a pager for their care. -- payer for their care. finally, because of the unusual nature and size of the optional medicaid expansion, arkansas is making the unusual decision to consider its macroeconomic impact. if the state legislature approved the expansion, medicaid payments to the state will grow by $800 million a year, given the small size versus the federal tax base, ark. assumes federal medicaid payments will come from taxpayers in other states. arkansas's economy will be larger if they choose to expand medicaid. the difference will have some impact on tax revenue. we estimate the fiscal benefits will outweigh the costs. the expansion is expected to save or increase state tax

dollars by $44 million in fiscal year 2014, $150 million in 2015, and $700 million between now and 2025. thank you. >> there is still over seven minutes left on the vote. we will start with the questions. i would ask members who feel it necessary to leave because they are so slow it takes them over seven minutes to get to the floor that we do leave quietly.

the committee will remain a in session and we will recess when there is no time left on the vote. i will start with myself. november 26 of this year, health and human services released a long awaited rules detailing the essential health benefits that must be covered by any health plan offering a plan in the aca exchange. i understand this has far reaching consequences on premiums. benefits must be provided. according to the notice in the federal register, the rule was approved by administrator on august 1, 2012. that is three months before. yet the role did not receive approval from secretary sebillius until two weeks ago. what did it take two month for the administration staff to review -- and yet the public

will have only four weeks to review during the period of public comment on the ruling issued on november 26? i would note this is a time of year when people's focus is generally on things other than long awaited rules. >> we put a bulletin on the essential health benefits quite some time ago and got comments on the bulletin. the public had an opportunity to provide public comment on essential health benefits before the proposed rule was put out. there were some changes from what had been in the bulletin, but by and large what is in the bulletin is what is a in the proposed rule. i think there has been ample opportunity for the public to

comment on the rule. >> it is your opinion that wisconsin, pennsylvania, and louisiana -- they actually knew what the role was going to be and could be confident that they knew what the rule was going to be and could begin to make plans accordingly? >> ahead the bulletin that lit up the approach using the benchmark approach, which basically said as the law does that the essential health benefits are based on what is in a typical employer plan. they did the state had the option to choose from a range of benchmark plans.

>> to tell us wisconsin is confident that what came out on a pamphlet would be sure what the rule would be? what's i think we saw have questions on what the package is. >> i t why. -- thank you. i accept that as your answer. let me ask you on november 20, the "new york times" posted an article that it had been delayed as the administration tried to avoid stirring up criticism from lobbyists and interest groups in the final weeks of the presidential campaign. if that is accurate there was a presidential election between august 1 of 2012 and november 26, 2012, that is a fair statement.

>> yes, i believe president obama was reelected. >> that being the case, was the role delayed as to not to interfere with the happy occasion you just referenced? >> i am not aware of the sources for that and i am not aware that that happen. >> for those of us prepared to lay down the affordable care act, it did strike us as change that the rule was available for discussions in august, but not published as a rule until after election day. there does seem to be a regulatory push now of a federal agencies to get things moving and up off the deck none of the election is settled. i am not cynical, but there are people of in -- there are people who are. a 33 month delay on the operation of these exchanges does cause some of the people who are cynical and enter this town to ask the question -- what is the hold up?

this is an important deal you are doing, and it appears to be it is possible the cynical people could be correct. it was held up for a critical -- political reasons. i would appreciate -- it has been hard to get information out of your agency. governors had trouble, members of congress had trouble. i would appreciate the expeditious handling of those questions when they come to you. >> we will do the best we can. >> my time has expired. >> the committee is in recess and will convene after the last vote.

[captions copyright national cable satellite corp. 2012] [captioning performed by national captioning institute] >> the committee will reconvene. the committee has reconvened, and the chair recognizes the ranking member of the subcommittee, five minutes for questions. >> thank you. the title of this hearing is, day of uncertainty, and implementation of exchanges and medicaid expansion. i want to say, mr. chairman, i think the title is provocative. i think it does a disservice to the progress of the people with regard to the aca. it has prevailed and it is the law of the land.

that means people have already experienced positive changes from the affordable care act whether from the elimination of lifetime limits, the ability to stay on health care plan, coverage with no code-sharing, lower prescription drug costs. the affordable care act is improving the lives of americans already. 30 million americans who otherwise would be uninsured could have access to health care. millions more will be put in charge of health care as opposed to being at the mercy of insurance companies and the arbitrary limits and fine print of denying coverage for critical services and overly burdensome cost sharing. the states have an option to help make this a reality for their residents, and cms has been working with the states who want to move forward to make this work.

my questions are to a mr. cohen. critics have cited a dearth of information, the lack of answers, the inability to move forward -- you have heard that from other panelists. can you talk about the average efforts, the type of assistance you have provided over the past two years? >> thank you. i am happy to do that. in 2012 alone, we have posted over 115 even for different states that total approximately 215 hours of technical assistance. we have done 69 webinars. we have held two in person conferences where people have come in, over 1000 attendees have come to those. we are on the phone literally every day with people from the state's helping them, answering their questions, and enabling them to move forward. >> i appreciate that.

>> thank you. i think it has a different experience from past experiences were usually put out that in some regulation and hope for the best. we have been aggressive with our partners to reach out to states and to bring them into parley our decision making, and certainly their decision making as they are going forward. by topic, by groups of states, and individually. we do reviews on their system development individually with the state's. we are providing coordinated technical assistance and support. we have pulled together workgroups and learning collaborative of groups of similar interests so we can help them think about how to problem solve with respect to the issues that are of most in their minds. we have provided different tools for them so that as they are

moving forward looking at our regulations and guidance and thinking how to implement it, they have easier ways of doing it than if they reinvented the wheel and did it on their own. >> can you talk about the interactions you have had with the center for consumer information in preparing your state based exchange for maryland? >> we have had a terrific interaction. there are opportunities for all states that we have taken advantage of. we have regular consultation. we have been impressed by it. they have really met us where we are on a particular issue. sometimes it is general health. sometimes it is specific. they have been willing to move at the speed we are moving on a particular issue. from maryland's perspective, it has allowed us to customize implementation a denture a way

we think work for our state. >> i will try to get a question and to mr. allison. >> if repeal the would actually increase the budget deficit by more the $100 billion. the aca contends cost- containment measures by improving care. i was interested in arkansas's payment reform efforts. could you tell us a little bit more about the payment reforms and how they would bring down costs? >> we believe the in arkansas the incentives that we face and the activities we are engaged in in our payment and improvement initiative are aligned with the center for medicare and medicaid innovations. we are engaged in moving away from a fee for service to pay

for out comes a denture health care instead of the process that we currently paid for. -- outcomes of in health care instead of the process we currently pay for. we are looking for patience centered care. if we look for that, we are going to have to pay for it. we have not done that in the past. we are engaged and dramatic and sweeping changes working with our private health insurance partners in arkansas. we have worked closely with cms to make the first of these changes, implementing in october for the state plan, not through waiver. it incentivizes for adhd, perinatal care and upper respiratory infection concentrated and incentives for a team based care. that happen very quickly. appreciate cms' support for that. >> thank you, mr. chairman. thank you for being here.

when you hear both sides, kind of the jekyll or hide type. the patient protection affordable care act provides health insurance will be affordable in their exchanges. the claim put forth was that if you like your insurance, you can keep it and health care cost will go down. that is how it was sold to us. some of us read the bill, most of those passing the bill before we could read it. the cms proposed a 3.5% fee on all plans and a federal exchange. are you afraid the fee will get passed on to individuals and families purchasing in your state? this is a question for mr. smith, greensein, and alexander? \

>> to be paid not only to the purchaser, but this also apply to medicaid managed care plans as well. there is a direct impact on the state budget for these new costs. >> it puts them in a competitive disadvantage as well. we fully expect it costs get passed on rather than absorb with already small margins for the plans that participate in medicaid managed care. >> the short answer is, yes. i would concur with my colleagues. >> i appreciate the shortness of the answers. do you know what the national debt is right now? just the national debt? it is on every website in the world. >> $16 trillion. >> the you know what the deficit spending has been the past four years?

you do not know? do you know? >> i do not have that never mission right here. -- that information right hre. >> i do not know the exact number. >> >> in 2009 it was $1.40 trillion. $1.30 trillion. that is more spending we have taken in. 2012, $1.10 trillion. already this year, the first two month, $292 billion more a in spending that we have taken in. if you push that through to the full year, it is probably $1.70 trillion additional deficit added to the $16 trillion debt. that is part of this debate. because medicare and medicaid our entitlement programs, and

that is part of the reason we will be here until christmas and new year's and have all of these battles. let me go again -- this is about the state of illinois. estimates from earlier this year have the state of illinois with unpaid bills growing to $34 billion in five years. that will be $2 billion more than illinois's total projected revenue for the year. the biggest problem -- can you guess with the biggest problem is? >> medicaid. >> medicaid has been on an unsustainable path for years and is expected to increase 40% over five years to $12 billion by 2017. over all this will trade an estimated $21 billion in back pavement backlogs. does not factor in the unknown cost for new medicaid requirements from -- what would you guess?

>> from the affordable care act. >> concur. >> would you believe will be the result of these backlogs remain? what do you think? >> we have been looking at what happens to medicaid rates themselves. i know there is a lot of discussion about the newly eligible, but it also affects the entire program. otherwise we will not have providers that was the medicaid payments unless the rates go up. >> i worry about the participation in medicate from the provider perspective, but also programs like education that it crowded out within the context of the state budget because we continue to consume a greater proportion of the overall budget in health-care costs.

>> i concur with the last one. i would like to just add to mr. greenstein. the crowding out of other priorities is extremely important. infrastructure is important for pennsylvania. the growth of these programs growing at 8% to 10% while revenues are growing at 2% keep crowding out education, transportation, and have a direct impact on jobs. >> thank you very much. i yield back my time. >> mr. chairman, -- >> the chairman recognizes mr. waxman. >> medicaid is an expensive program. we have a lot of people who are very poor in this country. we can save a lot of money if we did not give them health care. i suppose mr. smith, mr.

greenstein, and mr. alexander, you think the way to solve it is to put it a danger a block grant? >> yes. >> if given the choice, i would take it. >> absolutely. once you three would like the block grant. that simply shifts the cost. the states cut back on services for these people, and the disabled and the port will go without health care. your idea is not going to succeed. that was one of the issues of the presidential campaign, and you lost. we have medicaid. let's accept that fact. you are running the programs, you ought to be supporting the program are running. the medicaid expansion of the affordable care act is a step forward for the health-care system that will improve the lives of tens of millions of americans. the expansion will reduce care

costs in states around the country and will provide states with extremely generous enhanced match rate from the federal government. we crafted this piece of the affordable care act to ensure medicaid expansion would not only be good for americans health but for the health of state budgets. a new report from the kaiser family foundation shows just how beneficial the expansion will be two states around the country. the report found over the next decade with the federal government paying for well over 90% of the cost, arkansas will reduce the uninsured population by nearly 150,000, louisiana by 270,000, maryland by 140,000, pennsylvania by 310,000, and wisconsin by nearly 125,000. i blocked -- i doubt that a block grant would accomplish their roles. it would reduce uncompensated care costs through the medicaid expansion, over $25 million savings and arkansas, $180

million in maryland, over $875 million in pennsylvania, nearly $250 million adapter wisconsin. these are big, staggering impressive numbers. even more impressive is that the report found that given the generous federal match rate expansion medicaid and it dramatically reducing would decrease the overall medicaid budget saving an additional $250 million in wisconsin and 1.7 $5 billion in maryland. i assume you can talk about the importance of engaging in detail of a comprehensive analysis of the medicaid expansion in arkansas and the conclusions it led you to.

you think this would be a good deal for your state. " i think it will be a very good financial deal for the state of arkansas. >> these expansions are going to be a good deal, but it seems to me that the three witnesses at the center have an ideological feud that they would like to be redone. the affordable care act is an important piece of legislation. since your exchange planning as well under way, i understand insurance companies are sending in a great number of letters saying they want to sell insurance in the states. i am curious to know, are you concerned that insurers will not show up, or do you think they will show up? >> we have gotten more insurers interested then serve the market now. we think under the affordable care at the will be drawing new ventures in maryland including plans very focused on better health, improved value. it will be a positive for the market. >> we have more insurance

companies willing to offer insurance policies at competitive models for the consumer choices going to be more successful under the circumstances. i submit that the competitive model that mr. greenstein indicated he would like to see, which is called a consumer market driven health-care reform, is not going to work for medicaid patience. nobody will be vying for the medicaid patience. the aca has been off for nearly three years now. it has an impressive list of accomplishments. basic reforms are still ahead of us. over 30 million uninsured will get quality affordable care, etc. many of us fear the purpose of this hearing is to say we cannot look forward. we cannot implement a lot. somehow we do not have the affirmation needed to do it. that is flat out wrong.

it seems to me this is the latest approach to try to undo the affordable care act. republicans have failed to repeal the law. they did not win the presidential election. they did not find a law was unconstitutional. let's not buy into the next line of attack that the law must be delayed. at's recognize that we have lot whether you wanted it or not. >> again, i think we have been

looking at what happens to medicaid rates themselves. we are expecting -- again, i know there is a lot of discussion about the newly eligible -- this affects the entire program. otherwise, we will not have providers. >> mr. greenstein? >> i worry about the participation in medicaid from the provider perspective. i also worry about education in the context of the states' budgets because we continue to consume a greater proportion of the overall budget in our health care costs. >> i concur. i am the last one. i would like to just add to mr. greenstein -- the crowding out other priorities is extremely

important. you mentioned we had the chip program in pennsylvania. you feel it actually works and a less costly manner. is this something you are able to ask for a waiver to use that instead of the other program? >> i do done know of any waiver to be able to make that change.

>> is that something that you would recommend congress address? >> if things are working in the state they should do that. >> our states allow waivers if they have a program they think are working well? >> there are a wide range of waivers available for the states. their younger siblings are available for medicaid. right now we have children enter the same family and in come -- i know when we did the prescription drug bill, pennsylvania had a program for that. we could work and legislation to make sure that works smoothly. i hope we can get together with

mr. alexander. you also said you cannot use an asset test. what do you think is the benefit of having an asset test? >> an asset test is a program integrity tool to be able to ferret out if families or individuals have high incomes or assets that would -- in that they should not be on the program. >> such as? >> if somebody owned a lodge home and cars and they had specific accounts, we would be able to utilize them in the same way we do with the food stamp program. >> it should be an option.

>> how about presumptive eligibility? >> it is another program integrity measure to be able -- presumptive eligibility presumes that people are eligible. we do not have guidance from cms as to who would be on the hook for that money if these individuals later on are found not eligible. would the state pay the bill? would the federal government be paying that bill? i do not think anybody should be paying that bill. >> i assume you asked for the same sort of assistance for adoption of passive medicaid renewals, duplication of efforts, one-size-fits-all -- those are areas, are you asking that one of the things we should do is either find out we are missing something in the law, an absence of that, to look to this committee to pass rules that would help you to that? >> i think that would be very helpful.

the more you engage the states, the better. we know how to run these programs. the more information you have from all the states, it would be very important. the purpose of these programs is to provide quality care to low-income individuals, and we at the state level have to be vigilant in terms of being able to prevent people that have the ways and means to provide for themselves. >> mr. smith, any comments? >> i would agree with secretary alexander. he summarized it well. >> the other witnesses? >> i would echo that sentiment in that every day with a finite budget, we do not have the option to run up large deficits. we have to balance our budget every year. if there are resource decisions to make and how we allocate those resources, we would like

to see the resources focused on the people who need them the most rather than those who have the means to pay for the care of themselves. >> mr. chairman -- i would ask that you would submit in writing some of the recommendations made by the witnesses? >> the record will remain open for 5 legislative days for witnesses to submit. the chairman -- >> i thank you for your courtesy. i appreciate you being here this morning. i have the following questions to be answered yes or no. recently, we have heard a lot of talk about a $63 aca fee. is it a tax? >> no. >> it is not in the irs code. >> no. >> cms has the authority to set

this fee through aca. is that true? >> yes. >> it sets up a total amount to be raised. is that correct? >> yes. >> this fee will be $63 in 2014, and lower in each year after. is it true that this fee is short term and will be dwindling? >> yes. >> i want to make sure that i understand this correctly. the fee goes into a reinsurance fund that will stabilize premium costs in individual insurance markets. is that correct? >> yes. >> this will help aca to provide money to insurance companies to deal with large amounts of the vulnerable population, those with pre-

existing conditions and high health care costs. is that correct? >> yes. >> this fee will lower insurance premiums in the individual market because insurers will not have to factor in the cost of disproportionate, high-cost enrollment of high risk patients? >> yes. >> isn't it true that this will benefit employer plans and employees with stable prices because they will have to pay for the cost that occurs when there are people out there without insurance or no means to pay for health care. yes or no? >> yes. >> at the end of the day, our constituents with pre-existing conditions are covered and by so doing we actually lower and

stabilize the costs of health care for all of our citizens? >> yes. >> thank you. i want to say a few things. we have the law of the land. i am hearing no end of carping and complaining about it. the hard, simple fact of the matter is that health care costs in this country are running away from us. they will destitute the nation. we have to do something to get it dealt with. we have to get all the people covered. we have to see to it that we deal with the problems of inadequate health care for our people in the future. this is a very serious matter. it is going to attack almost every single program including medicare and medicaid and the costs that the states are being compelled to meet with regard to medicaid. i find myself very distressed

because i feel that i'm in the company of a bunch of people who are looking at the doughnut and seeing only the hole. we confront a situation where we have to address these situations by making intelligent investments. one thing that terrifies me is that there are people in this country who can look and see the costs of everything, but they cannot see the value of anything. tryingue of what we're to do is to see to it that everybody has health care, to see to it that the health care of this nation is affordable and available to all of our people, and to see to it that the people of this country have a system which makes available to the ordinary citizen the right of health care. it is in my view a right. it is not a privilege. there are a lot of people who seem to look at it as a privilege.

i am hopeful that we will look at this as an investment in the future of the country. we will try to do something to see to it that health care in this country, which is the greatest in the world, is shared amongst the people and they are not denied this and they are not dying because they do not have health care. i hope that this hearing will lead us to an understanding of these points. i yield the balance of my time. >> the gentleman yields. i will recognize the gentleman from louisiana, dr. cassidy. >> just so folks know, we have some implied accusations that some of us do not care. i am a doctor who on tuesday and monday will be in a hospital for the uninsured. this includes medicaid. i just want that on the record. i have a lot of questions.

mr. cohen, i'm not clear -- will the money of the premiums going to health savings accounts, will that be considered in regards to mlr? medical loss ratio you see what i am saying. >> to the extent that it is spent. >> so if somebody does not spend the money, the insurance companies do not get credit for an expenditure? >> that is right. >> if somebody is frugal and does not buy an overpriced good and takes care of themselves, they keep their weight down, insurance companies would be penalized? >> they are not penalized. >> you are going to take a portion of that.

you're going to have them rebate that cost. >> the medical loss ratio provision means that insurance companies have to spend 80 cents of every dollar on health care. >> it is only if the patient spends the money. >> we are trying to hold down costs, but we are putting in an incentive to spend the money. it is hard to keep a straight face when mr. waxman speaks about access to affordable care. the only thing i have heard about this is that premiums have gone up by $2,500. dr. sharfstein, only 65% of doctors in maryland accept medicaid patients. that is a statistic i can give you the source from. how many of those medicare patients who are unable to find a primary-care doctor seek their care in an emergency room? we know -- do we know those statistics?

>> i don't know i have a specific answer. >> i have limited time. i apologize. in maryland medicaid, i assume there is no deductible. you guys make out like a bandit. if i was a big blue state, i would be all for this expansion. according to kaiser family foundation, you will save hundreds of millions of dollars over 10 years. let me put myself in the role of somebody i might be seeing tuesday morning in the hospital if i work in maryland instead of louisiana. you're making 140% of the federal poverty level. i have a $2,000 deductible. on the exchange. i am paying $600 a year. do you think that a family at 140% of federal poverty can afford that $2,000 deductible? >> my perspective, this has a lot to do with, compared to

what? 140%, there is no access to medicaid. >> i thought you said -- >> no, we do not. they have no access. we are able to give them affordable access to a subsidy. >> let's take a person at 140%. do you think we will be able to afford that $2,000 deductible? do we really think that family at 140% of the federal poverty can afford that deductible? >> we think there is a lot of value for them. we are working with some people in maryland to try to figure out how to develop an average plan that engages -- >> even though it will cost them

$2,000. it is not a percentage but the dollar amount. when you're at 140%, $2,000 might as well be $50. >> it is not every family that pays $2,000. >> only if they accept the insurance portion. in your testimony, you stated that the state of arkansas spent $500 million to implement this plan. >> no, that is not correct. the testimony says that the legislature will have $500 million for the second half of this year 2014 -- that would include almost all federal funding. >> that will be all federal dollars? >> almost all federal funding. ok, so they have to appropriate federal dollars. >> correct. >> the economic aspect of that -- let me point out, the kaiser family foundation study this.

it said it would cost louisiana $1.8 billion over 10 years. arkansas, $1.2 billion. that is assuming that we do not have to raise taxes on the federal or state taxpayers to pay for this extra money which is an assumption which seems a little silly. i yield back. >> the chair now recognizes the gentlelady from california. >> thank you, mr. chairman, and to all of our witnesses, thank you for your testimony and availability today. i want to give mr. cohen just a minute to respond to the previous questioner. the question about the medical loss ratio. >> what we have said is that 80/20 rule says that insurers have to spend 80 cents of every dollar on care.

>> thank you very much. i want to address some questions. the affordable care act includes a provision that will bump up payment for primary care providers in medicaid to the rates we currently paid to medicare. on average, this will improve reimbursement by 67% on average nationally. my state of california, the increase will be even more important, a 113% increase from the current reimbursement. could you explain why raising reimbursement for medicaid providers is so important? >> in the medicaid program, any changes in the health care market more generally, the appreciation of primary care -- that is to avoid catastrophic care.

people meet regularly with primary care. what this boost does is encourage more primary-care practitioners to enroll in the medicaid program, participate, and to provide a greater share of their hours of service to medicaid beneficiaries. we are very excited about the opportunity to expand and deepen the access, particularly around primary-care. >> i share your belief in that. as i understand it, the research on provider rates shows that faced with higher rates, that has greater numbers of a providers accepting new patients. given that, do you think that increasing rates to medicare levels for primary-care physicians will both increase the number of physicians participating in the program

and allow some that are already to increase the number of medicaid patients they see? >> i do think it will boost participation. i think there is a general agreement that it will boost participation. i think that rates are one of many factors that help us make sure that we have a good provider participation rate. this will go a long way to ensure greater participation, particularly in the needed area of primary care. >> as you know, there is a lot talk from some in congress that the medicaid budget should be used to pay for sgr. i have consistently voted to get rid of the sgr. this idea is foolish. this literally incentivizes providers to take care of senior citizens rather than the poor. the health care community agrees.

>> i appreciate your support for entering good primary-care in the medicaid program. >> when states expand medicaid, they pull in federal dollars to provide health insurance to millions of people. right now, these uninsured people are relying on health care. many of our states cannot afford to do this and they're cutting. would states be able to save some significant dollars in their state budgets? could the net cost of expanding medicaid could be quite negligible or even a gain? >> i think that is absolutely correct. different states have done their studies. different organizations have done studies, and it varies by state, but the amount of the increase overall, under the kaiser study that people have

been citing today, the medicaid expansion is less than one-half of 1% in terms of the impact on the budgets. then as you say, there are offsetting savings. uncompensated care will be reduced, and governor sandoval came out in this week in support of the medicaid expansion. he cited in nevada the reduction in mental health services. those are funded by the states. that gap will be felt in the medicaid expansion. >> thank you very much. >> thank you very much. mr. chairman, as a close, i ask unanimous consent to enter the following letters into the record. a letter from the majority of our nation's physicians and a letter from the california children's hospital. >> without objection. so ordered. i would like to insert into the record a letter from the